Gas deal with Europe

Iran expects to finalise by March next year a $7 billion deal with a European firm on developing the offshore Lavan natural gas field in the Gulf, an Iranian official said in comments published on Monday.

The Lavan gas field has in place reserves of around 10 trillion cubic feet

Iran expects to finalise by March next year a $7 billion deal with a European firm on developing the offshore Lavan natural gas field in the Gulf, an Iranian official said in comments published on Monday.

The official, Mahmoud Zirakchianzadeh, did not name the European company. Major European firms France's Total and Royal Dutch Shell have delayed or scrapped plans for multi-billion-dollar natural gas export projects in Iran, which is under U.N. and U.S. sanctions over its disputed nuclear work.

The Lavan gas field, which was discovered in 2003, has in place reserves of around 10 trillion cubic feet.

'The $7 billion agreement on the development of this field will be finalized by the end of the year,'Zirakchianzadeh said, who heads the Iranian Offshore Oil Co.(IOOC).

He was referring to the Iranian year ending on March 21. In February, Polish gas monopoly PGNiG said it had signed a preliminary deal with the IOOC to cooperate on managing already-discovered gas reserves.

But PGNiG's strategy director denied an Iranian news agency report that a Polish company, most likely state-controlled PGNiG, had signed a deal with Iran to invest up to $1 billion in oil and gas projects in Iran.

Poland, which depends on Russia for 48 percent of its gas and nearly 70 percent of its gas imports, has made diversifying supply a priority. The deal with Iran could pave the way for such a diversification.

Zirakchianzadeh, the IOOC head, said turning the gas into liquefied natural gas (LNG) for export purposes was the main goal of the Lavan gas field development. LNG is gas condensed into liquid at sub-zero temperatures.

Iran, the world's fourth-largest crude producer, sits on the world's second-largest gas reserves after Russia. But U.S. sanctions hindering access to technology has slowed development of gas exports.